Govt to miss exports target by huge margin

ISLAMABAD - The government will miss the exports target by a huge margin under the Strategic Trade Policy Framework (STPF) 2015-18 mainly due to the limited implementation of government announced support in STPF and high cost of production.

Pakistan’s exports are expected to remain at $23 to $24 billion during ongoing fiscal year. The government under STPF had set $35 billion exports target by June 30, 2018. The exports target announced in the trade policy could not materialise. The STPF had not helped to increase the exports during three years, rather exports continuously declined.

The exporters believe that government had not accepted their proposals in last few years, which resulted in decline in exports. Pakistan’s exports had declined to $20 billion in last fiscal year from $25 billion of few years before. Exports were adversely affected due to high energy costs, exchange rate appreciation and high import tariffs on inputs.

“We were continuously asking the government for currency devaluation, releasing tax refunds and reducing cost of production in last three to four years. However, the government had accepted our one of the proposals to devalue the currency after four and half years, which recently helped in increasing the exports,” said an office bearer of All Pakistan Textile Mills Association (APTMA) while talking to The Nation.

The PML-N government had paid Rs31.3 billion sales tax refunds on May 31 to traders and exporters a few hours ahead of completion of its five-year term of government. The total amount of refunds issued till May 31 reached Rs100 billion in first 11 months, up from Rs54 billion paid out over the corresponding period of last year.

However, the measure had not satisfied the business community. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has said the PML-N government failed to honour its commitment about releasing stuck-up refunds to the business community leaving them in a quandary. Refunds worth trillions of rupees are held by the government since years which are not being released despite repeated promises by the top government functionaries, said Ghazanfar Bilour, president of the FPCCI.

The exports had started increasing after the government had devalued the currency in December last year. Exports recorded growth of over 13 percent and reached $19.2 billion during ten months (Jul to April) of the ongoing fiscal year from $16.9 billion of the same period last year. The government recently extended the export package worth Rs195 billion for next three years to further improve the country’s exports, which have already started increasing. The Economic Coordination Committee (ECC) of the Cabinet, which met under the chair of Prime Minister Shahid Khaqan Abbasi, extended the Prime Minister’s Export Package for the next three years i.e. up to 30th June, 2021. The package aims at improving the competitiveness of the textile and non-textile export sectors to continue the export growth in the coming financial years.